With mobile games going mainstream, gaming industry grows to $91 bn in 2016

A man poses for a photo in front of a Microsoft Xbox sign opposite a Sony PlayStation sign at the Electronic Entertainment Expo, or E3, in Los Angeles, California, United States, June 16, 2015. REUTERS/Lucy Nicholson - RTX1GT94

The Interactive Entertainment or the gaming industry is constantly evolving. With the addition of virtual reality (VR) and augmented reality (AR) segment last year and mobile games becoming mainstream, the entire industry is getting bigger and mightier.

According to a Superdata report, the gaming industry was worth USD 91 billion in 2016. The mobile game segment was the largest at USD 41 billion,  18 percent yea-on-year (YoY) increase, largely driven by blockbuster hits like Pokémon GO and Clash Royale.

It was followed by PC games (including social and free to play games) worth USD 36 billion. Console games’ had a modest USD 7 billion share in the market.

VR, eSports, and gaming video content were relatively small in size, but they are growing fast and holding promise for 2017, said the report.

Mobile Games

“The mobile games market has started to mature and now more closely resembles traditional games publishing, requiring ever higher production values and marketing spend,” the report stated. This segment is going to see a steady growth with revenues touching as high as USD 55 billion in 2019.

Multiplayer Online Battle Arena (MOBA) games like Clash Royale or Vainglory are going to be the driver for this segment in the coming years.

PC Games

PC games segment is diverse in terms of content and interaction with the customer. It includes sub-segments such as Social (games over Facebook or other social media sites), free-to-play (F2P), PC subscription and Premium PC games.

Biggest among these is free-to-play sub-segment. F2P Massively Multiplayer Online (MMO) games have 92 percent of the MMO market players and generate 87 percent of the revenue. MOBAs are also holding their position steady.

Even after seven years of its launch League of Legends is still on the top earning USD 150 million per month. Dota 2 comes in second at USD 23.4 million per month.

Revenue from Premium PC segment was USD 5.4 billion, estimated to climb up to USD 6 billion in 2019. For this sub-segment, Overwatch and CS:Go were the top grosser in 2016 with USD 585 million and USD 257 million.

Console Games

Video game consoles are not used for just playing games, they are used extensively for other non-gaming activities as well. Data provided by Nielsen says that less than half of the usage of consoles is for playing games, rest shared by watching and downloading TV shows and movies.

Statista

Traditionally, a new gaming console is released after every four or five years but recently, with Sony releasing PS4 Pro last year and Microsoft finally unveiling its XBOX One X (earlier codenamed Project Scorpio) in in E3 2017, competition is ever increasing to cash the diversification in usage. They are becoming more powerful and come with greater functionality like VR enabled.

Consoles are becoming more powerful and come with greater functionality like VR enabled. Microsoft claims the XBOX One X to be 40 percent more powerful than any other console in the market.

The interest in this segment often leads to innovation in the industry as well. The emergence of the Oculus Rift and HTC Vive set the stage for computer part developers like Nvidia and AMD to release affordable high-performance graphics cards, like Nvidia’s GTX 1060 and AMD’s RX 480, for users to build “VR ready” PC setups.

Revenue from Console games in 2016 was close to USD 7 billion which is expected to climb up to nearly USD 8 billion in 2019. Call of Duty: Black Ops III with the gross of USD 591 million led the revenue chart along with Fifa 16 which earned USD 387 million in that year.

According to an estimate by Newzoo, the Chinese giant Tencent is the leader in earnings from games with revenue of USD 10.2 billion followed by Sony at USD 7.8 billion.

Statista

Microsoft has priced XBOX One X at USD 500 in the United States – USD 100 more than the PlayStation 4 Pro, it will be interesting to see how many takers it finds and what fortune does this bring for Microsoft which is fourth in the earning revenue from games.